Consider an NBA superstar Kobe Bryant and one of your economics professors. Who is likely to receive more economic rent in his/her job? Explain your answer
What will be an ideal response?
Economic rent is a payment for the use of any resource above its opportunity cost. Because it is harder to duplicate a highly paid NBA superstar like Kobe Bryant than an economics professor, it is more likely that the NBA superstar, who has a rather inelastic supply curve, receives more economic rent.
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Comparative advantage is based on
A) comparing physical endowments, such as mineral resources, of two countries. B) differences in opportunity costs between two countries. C) one country being able to outproduce another country in some good. D) comparing the capital accumulation of two countries. E) two countries producing the same good.
Refer to Figure 13-4. What is the area that represents the loss made by the firm?
A) the area P1bcP2 B) the area P0acP2 C) the area P2cdP3 D) the area P0adP3
If a price floor is set below the current market clearing price, then
A) a surplus must immediately occur. B) a shortage must immediately occur. C) there will be incentives for black markets to develop. D) quantity demanded will remain equal to quantity supplied at the current market clearing price.
Economist A believes that if tax rates are cut, tax revenue is likely to rise. This economist most likely believes that the percentage decrease in tax rates will ______________________________ percentage rise in the tax base
A) be larger than the resulting B) be equal to the resulting C) be smaller than the resulting D) occur long after the E) a and d